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Global Long-Duration Energy Storage Installations Surpass 15 GWh in 2025: Wood Mackenzie

Global installations of long-duration energy storage (LDES) systems crossed 15 GWh in 2025, representing a 49 percent year-on-year increase, according to the Long Duration Energy Storage Trends report released by Wood Mackenzie.

Among the technologies deployed during the year, compressed air energy storage (CAES) accounted for the largest share at 45 percent, followed by thermal energy storage at 33 percent, and vanadium redox flow batteries (VRFB) at 21 percent. Despite this growth, LDES technologies still represent only around 6 percent of global energy storage installations, with lithium-ion batteries continuing to dominate the market.

Cost competitiveness remains one of the biggest challenges for LDES deployment. In China, a four-hour lithium-ion battery project costs roughly $107/kWh, while thermal energy storage averages about $190/kWh and CAES projects around $201/kWh. These costs represent premiums of approximately 78 percent and 88 percent, respectively, compared with lithium-ion systems.

China continues to lead the sector, accounting for about 93 percent of global cumulative LDES installations, supported by strong government policies and programs such as the Special Action Plan for the Development of New Energy Storage (2025–2027).

The report highlights that long-duration storage will become increasingly important as countries pursue net-zero emissions goals. According to Wood Mackenzie’s projections, the average duration of energy storage systems may need to increase from about 2.5 hours today to nearly 20 hours under global net-zero scenarios. Countries with high renewable penetration targets—including Germany, Australia, and Denmark—are expected to rely more heavily on long-duration storage to maintain grid stability.

However, investment momentum weakened in 2025. Global funding for LDES projects declined by around 30 percent year-over-year, excluding support from the U.S. Department of Energy, which provided $1.76 billion in support to Hydrostor. Venture capital funding dropped even more sharply, falling 72 percent during the year.

Between 2021 and 2025, only three companies—Hydrostor, EOS Energy Enterprises, and Form Energy—raised more than $1 billion each, collectively securing over $4 billion in funding.

High interest rates, competition for capital from sectors such as AI data centres and grid infrastructure, and falling lithium-ion battery prices have created a challenging investment environment for emerging LDES technologies. While costs for technologies like VRFB may decline by more than 30 percent by 2034, they are still expected to remain significantly more expensive than lithium iron phosphate battery systems for similar storage durations.

Looking ahead to 2034, Wood Mackenzie expects lithium-ion batteries to retain a dominant market share of around 85 percent, while VRFB systems could account for about 5 percent and CAES technologies roughly 3 percent of installations. Lithium-ion manufacturers are also expanding into four-to-eight-hour storage solutions, strengthening their competitive position.

Several large-scale LDES projects are currently under development worldwide, including Highview Power’s 50 MW/300 MWh liquid air energy storage project in the United Kingdom and Energy Dome’s 20 MW/200 MWh CO? battery project in Italy. Multiple gigawatt-hour-scale CAES and thermal storage projects are also under development in China.

The report concludes that while pilot projects are expanding, large-scale commercial deployment of long-duration storage will depend on stronger market mechanisms, clearer revenue frameworks, and supportive policy incentives across global energy markets.